Member Sign In

You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating indiv idual securities.

If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.

What would you like to follow?

Salesforce (CRM - Free Report) rose to prominence in the tech world for its ability to empower businesses, big and small, to operate in an ever more digital world. The software as a service company currently boasts over 150,000 clients and has expanded into new growth areas such as artificial intelligence.

Overview

Salesforce seems like an attractive buy at the moment for many reasons that we will dive into. The key takeaway, however, is that Salesforce enables its customers to run modern, cloud-focused businesses that would otherwise require a ton of in-house talent, infrastructure, maintenance, and more. This means that Salesforce’s clients are likely to continue to spend money on subscription-focused customer relationship management services in order to remain competitive in today’s business environment.

So as long as the San Francisco-based firm can please its current customers, attract new ones, and innovate, Salesforce should be able to grow for years to come.

Marc Benioff’s company is already one of the largest players in the quickly-expanding customer relationship management industry. Salesforce offers its business clients a wide range of sophisticated web-based platforms to help run sales, marketing, e-commerce, analytics, and much more.

Shares of CRM are up over 43% in the last year and have bounced back to right around their 52-week highs during the past month and a half. We can also see that Salesforce has consistently outperformed its peer group—which includes Adobe (ADBE - Free Report) , Oracle (ORCL - Free Report) , and VMware (VMW - Free Report) —since around the start of 2018.

At the bottom end of the income statement, Salesforce’s adjusted Q4 earnings are projected to soar 60% to reach $0.56 per share. Last quarter, the company posted adjusted earnings of $0.61 a share, which crushed our $0.50 EPS estimate that would have marked a 28% jump.

Meanwhile, Salesforce’s adjusted full-year earnings are expected to skyrocket by over 93%. Investors should also note that CRM’s fiscal 2019 earnings estimate has come up by 4% over the last 90 days. The company’s fiscal 2020 EPS picture has also turned more positive, which is often a good sign since at least some analysts are higher on Salesforce’s bottom-line.

Growth

Clearly, we can see that Salesforce’s top-line growth outlook appears to be strong and steady. This might please some tech investors even more with Apple (AAPL - Free Report) headed for a downturn and Amazon (AMZN - Free Report) set to slow. The company also looks poised to grow its bottom-line even as it spends more money on analytics tools and AI.

Salesforce last year introduced a new wrinkle to its Einstein artificial intelligence system called Einstein Voice, which allows users to conversationally update tasks. Innovations like these could not only attract more clients but also become standard across the industry.

On top of that, Salesforce's $6.5 billion acquisition of MuleSoft last year should help the firm expand its client base and top line as it integrates MuleSoft’s technology that helps link disparate applications. And a quote from co-CEO Keith Block captures the core of why Salesforce seems like an attractive stock to consider right now. “Companies across every industry, in every geography have a mandate to digitally transform their businesses and are turning to Salesforce as a strategic partner,” Block said in prepared statements last quarter.

Bottom Line

Salesforce and its SaaS model means that a bulk of its clients pay installment-based fees. This means there is less money up front, but it also helps create a more stable business. Let’s also not forget how popular and ubiquitous this software as a service model has become in the business world.

Salesforce is a Zacks Rank #1 (Strong Buy) at the moment that sports a “B” grade for Growth in our Style Scores system. CRM also has a strong history of earnings beats.

The company is currently projected to report its Q4 fiscal 2019 financial results on Wednesday, February 27.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

Resources

Client Support

Follow Us

Zacks Mobile App

Zacks Research is Reported On:

Yahoo

MSN

Marketwatch

Nasdaq

Forbes

Investors.com

Morningstar

This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Verizon Media; Microsoft Corporation; Nasdaq, Inc.; Dow Jones & Company; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc.

At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +25.28% per year. These returns cover a period from January 1, 1988 through February 4, 2019. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.

Visit performance for information about the performance numbers displayed above.

We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms and Conditions of Service.